Metals shares fall even as gold nears $400 again; analyst sees $433 in May

Section:

http://www.reuters.com/newsArticle.jhtml?type=topNews&storyID=4571061

NEW YORK, March 15 (Reuters) -- The Bank of Japan
is mulling ending its massive yen-selling interventions
in the currency market by the end of March, the Nihon
Keizai Shimbun reported from Tokyo in its early
Tuesday edition.

"Some central bank officials predict that it will walk away
from large-scale interventions by the end of this month and
that the upward pressure on the yen ... will abate beginning
in April," the Nikkei reported.

Many BOJ officials, as well as foreign central bankers,
question Japan's strategy of intervening in the currency
market to halt the appreciation of the yen, the influential
Japanese newspaper reported on its online site monitored
in New York.

The central bank is apparently hoping that it can stop
concentrating on reining in the strong yen and shift its
focus to policy options related to price trends and
interest rates, the report said.

The BOJ has in recent months intervened to sell yen in
massive amounts to protect its exporters, spending 7.5
trillion yen in January and around 3.34 trillion yen in
February, or approaching $100 billion in all.

The Nikkei report caused ructions in the currency market
where the dollar instantly slipped against the yen. It also
hurt U.S. Treasury prices since the BOJ has been using
part of its intervention proceeds to buy huge amounts of
U.S. debt in recent months.

* * *

http://www.reuters.com/newsArticle.jhtml?type=topNews&storyID=4571706

WASHINGTON (Reuters) -- A Treasury Department
spokesman on Monday said U.S. policy in support of a
strong dollar was unchanged and declined comment on
reports Japan might trim its currency interventions.

"There is no change in our strong-dollar policy,"
Treasury spokesman Rob Nichols said at a weekly
briefing for reporters.

The U.S. policy also holds that interventions by governments
-- large-scale buying or selling of currencies to affect their
relative values -- should be kept to a minimum.

Nichols declined to comment on a report by Japanese
economic daily Nihon Keizai Shimbun that the Bank of
Japan might cut its large-scale intervention, which is aimed
at keeping the yen's value from rising.

"We don't comment on specific market activity by foreign
governments," Nichols said. The Japanese newspaper said
many BOJ officials were questioning the policy of
intervening in currency markets by selling yen to buy tens
of billions of dollars to keep the yen's value weaker.

"Some central bank officials predict that it will walk away
from large-scale interventions by the end of this month and
that the upward pressure on the yen ... will abate beginning
in April," the Nikkei reported.

On other topics, Nichols said Treasury Secretary John Snow
had been invited to meet the presidents of the 12 regional
Federal Reserve banks, which make up the U.S. Federal
Reserve system.

Nichols said Snow and the Fed officials would hold a "social
dinner" on Monday night and they would discuss current
economic conditions among other topics.

The Fed's policy-setting Federal Open Market Committee
meets on Tuesday to plot interest-rate strategy for the period
ahead, amid universal expectation it will leave its key federal
funds rate at 1 percent, its lowest level since 1958.

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